Inegi said industrial output fell 1.1%, services 0.6% and agriculture 1.4%, the first quarterly contraction since late 2024.
Economists said weak domestic production, not exports, drove the slide, while softer mid-April inflation and disappointing GDP strengthened expectations for a Bank of Mexico rate cut next week.
Growth may return in the second quarter as USMCA review uncertainty eases and World Cup hosting lifts consumption, though fiscal tightening and a softer labour market are expected to limit recovery.
With its stimulus fueling imports, can Mexico's central bank alone steer the economy away from a deeper recession?
Will the World Cup's temporary boost overcome looming US trade policy risks and the critical USMCA review?